While moves towards greater international cooperation are welcome, the EU’s growing number of new free trade deals must be scrutinised. And in the case of the Japan-EU free trade agreement, the deal’s impact on the fight against illegal timber is a pressing concern.
For many, the free trade deal the European Union agreed with Japan on July 17, 2018 marked the return of stability to a fractured world.
“Politically, it’s a light in the increasing darkness of international politics,” claimed Donald Tusk, European Council President.
The message couldn’t have been clearer: at a time of increasing protectionism, isolationism and trade wars, the world’s largest bilateral trade deal was seen as a step away from the chaos threatening the international order.
Yet while moves towards greater international cooperation in the current climate are welcome, the EU’s new free trade deals – and the areas where they are likely to cause harm – must be scrutinised and challenged. And in the case of the Japan-EU free trade agreement, the deal’s impact on the fight against illegal timber is a pressing concern.
With the ratification process for the deal currently underway in the European Parliament, the window of opportunity for averting its dire consequences is closing fast.
The agreement will remove tariffs on all wood products traded between EU countries and Japan. But the European Commission’s own 2016 Trade Sustainability Impact Assessment of the deal showed it would boost incentives for illegal or unsustainable practices in many countries where Japan sources its timber and wood products. It could also sabotage the EU’s own fight against illegal timber.
The increased pressure on the world’s forests the deal is likely to herald, is down to three things.
First, Japan’s long history of importing illegal wood products.
Second, its toothless laws to prevent this happening.
Third, the weak text of the EU-Japan agreement.
To understand why this deal is alarming NGOs in Europe and Japan who work to protect forests, we need to briefly unpack each issue.
Japan is the world’s fourth largest importer of wood products and the third largest importer of wooden furniture. These imports come - to a significant degree - from places where illegal logging is rife.
Overall, Japan is the largest buyer of timber products from the Malaysian state of Sarawak, where rainforests are disappearing faster than anywhere else and where the timber industry, as Global Witness has revealed, is “riddled with corruption and illegality”.
Japan also imports significant volumes of high-risk timber products from Russia, including logs, sawnwood and veneer. Illegally harvested Russian timber is also imported to Japan indirectly via China as processed products, including lumber for housing construction. Links between illegal logging in Indonesia and paper-sector exports to Japan have also been established by Japanese NGO JATAN and Rainforest Action Network. In 2016 the Environmental Investigation Agency (EIA) documented how “the indiscriminate sourcing practices” of Japanese companies fuelled illegal logging in Europe’s last remaining virgin forests, in Romania and Ukraine.
Despite the comprehensive evidence of its timber imports being tainted by illegality, Japan’s laws still encourage rather than require the use of legal timber.
Japan’s recent Clean Wood Act does not prohibit either the import or sale of illegal wood, nor does it apply to all companies. It's an opt-in system, so only registered companies are required to have systems in place to ensure they can supply legal wood.
The EU-Japan trade deal does nothing to address the inherent weakness of Japan’s laws.
In fact, the relevant provisions of the deal’s text contain no enforceable measures preventing the trade in illegal timber, and simply mirror Japan’s laws, encouraging rather than requiring the use of legal timber. Moreover, it places Japan’s feeble voluntary measures on par with the mandatory European Union Timber Regulation (EUTR) by encouraging the trade in timber and timber products “in accordance with the laws and regulations in the country of harvest”.
Without significant changes, the free trade deal’s consequences will be profound.
- It will lower the bar on efforts to combat the international illegal timber trade, essentially discouraging other nations from initiating tough laws against it, while undermining the EU’s attempts to mobilise countries to tackle illegal logging through national legislation, such as the Voluntary Partnership Agreement trade deals with timber-producing countries.
- It will give Japanese companies an unfair competitive advantage over EU counterparts by allowing them to trade in illegally-sourced wood with impunity.
- It will likely mean a rise in illegal logging and timber smuggling, undermining the global fight against illegal timber.
Before it’s too late, therefore, the European Parliament must partially suspend the ratification of the agreement, amending the vague and inadequate provisions on forests and timber to match EU commitments to protect forests and create a level playing field between companies operating in Japan and the EU. If it fails to do so, it will be the world’s forests and the people who live in and depend on them who pay the price.